Ackermann, who steps down in May after 10 years as CEO at
the Frankfurt-based bank, may say that fourth-quarter net income
slumped 11 percent from a year earlier to 534 million euros
($701 million), according to the average estimate of 10 analysts
surveyed by Bloomberg.

Ackermann’s purchase of Deutsche Postbank AG and Sal.
Oppenheim Group to build up consumer-banking and wealth-management have failed to make up for lower investment-banking
profit triggered by the debt crisis. Anshu Jain, who will take
over as co-CEO with Juergen Fitschen, said last week that 2012
has started out “on a mildly better note” than 2011 ended.
Analysts will be watching for any signs the bank will change
direction under its new leadership.

“We’ll be looking for any signals from the new co-heads on
whether there’ll be a noticeable change in strategy or whether
they’ll continue the course set by Ackermann,” said Konrad
Becker, a Munich-based analyst at Merck Finck & Co.

Deutsche Bank advanced 18 percent in Frankfurt trading
since the European Central Bank said Dec. 8 it would offer
unlimited three-year loans to support lenders -- a decision
Ackermann described to CNBC as important in easing some of the
banking system’s “funding challenges.” Bloomberg’s 43-company
European banks index climbed 14 percent in the period.

‘High Volatility’

“Broadly the situation has improved, particularly the one
in Europe,” Jain, the 49-year-old head of the investment bank,
told Bloomberg Television’s Erik Schatzker in Davos,
Switzerland, on Jan. 26. “But look, the possibility of a tail
event continues to hang over us.” Until that changes, “high
volatility is the new norm, and one we’ll all need to just live
with.”

New York-based JPMorgan Chase & Co,, the biggest U.S. bank
by assets, posted a 23 percent decline in profit on lower
investment-banking fees and revenue from trading stocks and
bonds. Earnings at Goldman Sachs Group Inc., also based in New
York, dropped 58 percent, leading the firm to cut compensation
in response to falling revenue. Among the five largest Wall
Street banks only Morgan Stanley posted an increase in trading
income, excluding accounting gains, in 2011.

Deutsche Bank scrapped in November its operating pretax
profit forecast of 10 billion euros for 2011 and announced 500
job cuts amid a “significant and unabated slowdown in client
activity.”

Market Share

“Deutsche Bank has a fairly diversified FICC franchise,
although credit trading may weigh on the results like some of
its U.S. peers,” said Kinner Lakhani, an analyst at Citigroup
Inc., referring to fixed-income, currency and commodities
trading, its biggest source of revenue. He has a “neutral”
rating on the stock.

The company has been a “big winner” in taking market
share from rivals, Jain said in the interview, and there’s an
opportunity for more gains as changes in the industry, including
tougher capital rules and a restriction on business models,
create a “winnowing out” among financial firms.

The investment bank’s profit before tax may have fallen to
233 million euros in the fourth quarter from 603 million euros a
year earlier, according to the average estimate of nine
analysts. Revenue from debt trading probably dropped to 1.47
billion euros from 1.61 billion euros, while equity trading
revenue may have decreased to 457 million euros from 872 million
euros, the estimates show.

Deutsche Bank consolidated the results of Postbank in
December 2010, a purchase that followed the acquisitions of
private-wealth manager Sal. Oppenheim and ABN Amro Holding NV’s
commercial-banking operations in the Netherlands, as Ackermann
added businesses with more predictable profits than investment
banking.

Retail Banking ‘Catalyst’

Pretax earnings at the consumer banking unit probably
climbed to 384 million euros from 222 million euros, while
profit from the asset and wealth management business may have
tripled to 180 million euros, the survey found.

“Retail banking should be a catalyst for fourth-quarter
earnings,” said Andreas Plaesier, an analyst at M.M. Warburg
who has a “buy” recommendation on Deutsche Bank. “Postbank is
running well.”

The German firm in November announced a strategic review of
its global asset management division, excluding operations of
the DWS mutual fund unit in Germany, Europe and Asia. Executives
decided last month to pursue a sale of the businesses, which
have almost 400 billion euros in assets under management,
according to two people with knowledge of the matter.

Capital Demands

European leaders are demanding that some of the region’s
largest banks increase reserves after financial firms agreed to
accept losses on Greek debt to help rescue the country. Deutsche
Bank was among six German banks told to raise a total of 13.1
billion euros to boost core Tier 1 capital as a ratio of risk-weighted assets to 9 percent or more by June 30, after writing
down the value of sovereign bonds.

The company said Dec. 8 that it expected to plug the 3.2
billion-euro gap calculated by the European Banking Authority
six months early, without saying how it will meet the goal.

“I expect an improvement in capital levels,” said
Plaesier at M.M. Warburg. “But successively, and not in one
fell swoop.”